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HomeNewsArchivesWAPA CHIEF SAYS PSC REGULATION NOT WORKING

WAPA CHIEF SAYS PSC REGULATION NOT WORKING

There is an existing controversy regarding the respective powers of two duly elected bodies — the Public Services Commission and the Water and Power Authority Governing Board, whose members are selected by the governor with the consent of the Senate — and the attempt of one (the PSC) to usurp the powers of the other (the WAPA board).
Both of these bodies are direct representatives of the community's interests, and neither enjoys the responsibility of increasing the water or power rates, which is done only as the last resort.
The apparent conflict of purpose of these two entities has been recognized by the communities where more than 3,000 publicly-owned (municipally-owned) electric utilities in the United States operate and where the overwhelming majority of the PSC's are tasked by law to regulate only the privately-owned utilities and not the publicly-owned ones.
As a matter of fact, I know of only two where the PSC is assigned rate-making authority over publicly owned utilities, namely Guam and the U.S. Virgin Islands. And both of these have a common denominator: Georgetown Consulting Group is their technical consultant.
So here we have one duly elected body overseeing another duly elected body. Bureaucracy at its best! The PSC's annual assessment to WAPA represents hundreds of thousands of dollars. Add to that the numerous studies, discoveries and interventions of the technical adviser of the PSC. You can then appreciate that the disbursement by WAPA and the ratepayers through their electric and water bills is in the millions of dollars.
It would be more productive for the PSC to establish its own technical staff composed of competent local professionals to run and oversee its rate-making responsibility. This would entrust the local professionals with controlling costs and evaluating required areas of investigation for the benefit of the community without the apparent conflict of interest of the technical consultant. (The more studies and investigations they request, the more they benefit.)
The issues concerning the intervention of the PSC into the internal affairs of WAPA has been submitted as an appeal to the court for its ruling on this matter. Thus, we will not touch this aspect of our discussion any further.
Reliability and efficiency
During the daytime peak load periods, WAPA operates the combustion turbines as close as possible to their maximum rated capacity. The combustion turbines are most efficient when they operate at their maximum. As the output is reduced, their efficiencies are reduced proportionately. During the night hours, the electrical demand from our customers is reduced significantly. The generation must follow this reduction, and the combustion turbines' output must be reduced accordingly.
Some of the less-efficient turbines are shut down while others that are interconnected to our waste heat recovery boiler are also reduced following the electrical load but are kept operating because they produce steam to desalinate seawater for potable water production.
If WAPA were only an electrical utility, most of the combustion turbines would be shut down during the night and restarted early in the morning to maintain a high efficiency of operation. Combustion turbines can be shut down because they can restart quickly and are designed for daily cycling operation.
However, our dual role of a water and power utility forces upon us a modus operandi that requires us to operate the combustion units inefficiently (at low electrical output) during the nighttime to meet our water-producing responsibility. We cannot produce more electrical energy than the customers demand, and we cannot shot down the steam boilers that we have in our system, because these units take too long to be restarted and are not designed for a daily cycling operation.
The cost to our customers (loss of business, inconveniences, aggravations, etc.) of a kilowatt-hour lost because of a power interruption is significantly much higher than the cost of a KWH received from the utility. This concept applies here as in the U.S. Northeast. The blackout in the Northeast of the 1960s estimated the cost of a KWH not served because of the blackout as several orders of magnitudes higher than the price for a KWH at that time.
That is why electric utilities, especially public power utilities, are so much concerned with reliability. It is a crucial item for our customers and us. Efficiency is not the only game in town. Many times one must consider both reliability and efficiency in the generation mix. When the choice is between rotating blackouts and the operation of less-efficient units, we always choose to operate the less-efficient units, even if this upsets some desktop consultant.
The aeroderivative unit (No. 22)
In 1999, WAPA chose to install an aeroderivative peaking unit (a jet engine converted to generate electrical power) because of an alleged efficiency advantage over a Frame 6 unit. Experience, however, has demonstrated otherwise. This is a very delicate unit that requires very stringent jet fuel and water quality and water injection controls. It is not designed for uninterrupted, base-load duty as the industrial-grade Frame 6 is.
The Frame 6 and its sister frame units are the workhorses of the industry. The selection of the aeroderivative unit has proven that efficiency and reliability go hand in hand when we select a generating unit type.
The Frame 6 unit
The PSC has allowed the purchase of a Frame 6 General Electric combustion turbine since 1995. It has affirmed this decision several times since then, in 1998 and as recently as last April 2. In unequivocal language, the PSC affirmed the selection of the Frame 6 by including it in the approved projects listed in its order.
WAPA met with PSC officials a couple of times to ascertain the way to comply with their order, and there were definitive indications both times that they would be satisfied with receiving copies of the specifications of the unit to be purchased (the Frame 6). These specifications were hand delivered to the PSC on Aug. 12. These specifications guarantee that the new generating unit is the unit that they have affirmed on so many occasions.
A revision of the 1999 study was commissioned with the active participation of the PSC's technical consultant in the scope of work. R.W. Beck, WAPA's consultant, reconfirmed WAPA's conclusions that the Frame 6 was the unit of choice. It is the most economical choice and provides the best reliability in surviving multiple-unit outages similar to the ones we have experienced in the past and could experience in the future.
The added capacity of the Frame 6 also allows WAPA to start replacing antiquated, inefficient units. A copy of this report was given to the PSC as soon as it was completed.
The new unit is so important to the public health, safety and economic well-being of the Virgin Islands that both the governor and the delegate to Congress have provided their full support in WAPA's request for the granting of a waiver of the federal Clean Air Act (Section 325) requirements to allow WAPA to jump-start the construction of the new unit. This can save us more than a year in the commercial operation of the unit.
The U.S. Environmental Protection Agency, understanding our critical situation, has been working with us in trying to expedite the permitting process. It is comforting that people outside the territory understand our critical condition while others in the territory do not.

Editor's note: Alberto Bruno-Vega is the executive director and chief executive officer of the Water and Power Authority.
We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to source@viaccess.net.

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